New Delhi: The state-owned Oil and Natural Gas Corporation (ONGC) is aiming to offset nine million tonnes of carbon dioxide equivalent emissions by 2038, with an estimated total investment of Rs two trillion. Their approach involves integrating renewable energy sources, starting with onshore wind and solar installations across India.
This transition is set to begin reducing emissions from captive power generation and decreasing reliance on grid electricity purchases starting in the fiscal year 2026. In the North-Eastern Region, ONGC plans to capitalise on the area's substantial potential for small hydro projects. They aim to electrify assets in this region starting from fiscal year 2030, with an expected implementation timeline of five to eight years.
ONGC's initiative aligns with a global movement towards achieving net-zero emissions, reflecting a broader trend seen worldwide. According to the report titled 'ONGC DECARBONIZATION ROADMAP: Strategy for achieving Net-Zero Operational Emissions (Scope 1 & Scope 2) by 2038,' prepared by ONGC, over 140 countries, encompassing 88 per cent of global emissions, have committed to net-zero targets. Additionally, over 9,000 companies, 1,000 cities, 1,000 educational institutions, and 600 financial institutions have joined the 'Race to Zero', pledging significant and immediate action to halve global emissions by 2030.
This collective effort underscores the urgent need for decarbonisation, as highlighted at the COP26 summit in Glasgow. Net zero has emerged as a critical pathway towards ensuring a sustainable and resilient future for the Earth. ONGC's commitment to reducing emissions and integrating renewable energy into its operations contributes to this global goal of combating climate change and securing a viable future for all.
Current Necessity
Acknowledging the urgency, ONGC, a key player in the Indian oil and gas sector, has set an ambitious target to achieve Net Zero operational emissions for Scope 1 and Scope 2 by 2038. This report provides a thorough examination of ONGC's strategy to decarbonise its operational emissions (Scope 1 and 2), guided by the Science Based Targets Initiative (SBTi), demonstrating its dedication to supporting India's sustainable energy goals.
ONGC's Calculation
According to the report, ONGC has calculated its baseline emissions for Scope 1 and Scope 2 operational emissions for the fiscal year 2021-2022. This provides a crucial starting point for projecting future emissions. Scope 1 emissions, which come directly from ONGC's owned or controlled sources, are diverse: offshore assets contribute the most at 4.77 million tCO2e, followed by onshore assets at 1.2 million tCO2e, and plants at 1.04 million tCO2e. Basins, institutes, and services collectively contribute 1.79 million tCO2e, although their impact is relatively minor.
Scope 2 emissions, which are indirect and primarily from the generation of purchased electricity, also vary across ONGC's operations. Onshore assets account for the largest share at 0.12 million tCO2e, with offshore assets contributing 0.01 million tCO2e. Plants, services, basins, and institutes together add 0.05 million tCO2e to these emissions. This detailed breakdown highlights where ONGC's emissions originate and sets the stage for understanding how the company plans to reduce its carbon footprint moving forward.
ONGC's Net-Zero Roadmap
The decarbonisation roadmap is a strategic initiative aimed at achieving zero operational emissions (Scope 1 and Scope 2) by fiscal year 2038. This plan considers projected emissions for ONGC until FY 2038. As part of this effort, ONGC is shifting its focus significantly towards renewable energy. In the short term, ONGC will conduct pre-feasibility studies and surveys for all planned capacities, while also identifying suitable locations and acquiring land.
Furthermore, ONGC will collaborate closely with state governments and technology providers to facilitate these initiatives. The company's approach involves meeting all renewable energy targets through a hybrid model, with 30 per cent of the energy coming from solar sources and 70 per cent from wind.
To achieve its target of 3.894 GW of renewable energy through a hybrid approach, ONGC will focus on offshore wind and small hydro projects in Gujarat, Maharashtra, Andhra Pradesh, Tamil Nadu, and Assam. Following this, an additional 5.470 GW and 6.035 GW of renewable energy capacity will be developed in the same states. This ambitious plan requires a total capital expenditure (CAPEX) of ₹48,810 crore and will span from 2030 to 2038.
ONGC's strategy aims to diversify its renewable energy portfolio significantly, ensuring a sustainable energy mix for the future while contributing to environmental conservation and energy security in these regions. In addition to the renewable energy projects mentioned earlier, ONGC will focus on developing capacity in compressed biogas and biodiesel. To achieve this, ONGC plans to collaborate with potential players, startups, and establish strategic investments and partnerships. Furthermore, ONGC will develop capacities in green hydrogen and battery energy storage systems. As a short-term measure, existing diesel-based logistics vehicles across all operations will be replaced by electric vehicles.
Importance of Net-Zero
Net-Zero represents a pivotal pathway toward ensuring a sustainable future. The COP26 summit in Glasgow emphasised the global consensus on the urgent need for decarbonisation, with Net-Zero emerging as a cornerstone of collective efforts to safeguard a viable and resilient planet for future generations. The urgency of achieving Net-Zero carbon dioxide (CO2) emissions stems from the profound impact of greenhouse gases, particularly CO2, on the escalating crisis of global warming.
The burning of fossil fuels releases CO2 and other pollutants, disrupting Earth's climate system and exacerbating the natural greenhouse effect crucial for sustaining temperatures conducive to life. With global temperatures already surpassing 1.1°C above pre-industrial levels, there is an imminent need to significantly reduce greenhouse gas emissions.
Projections from the Intergovernmental Panel on Climate Change (IPCC) warn that without immediate action, we are on course to surpass the critical 1.5°C threshold set by the Paris Agreement as early as 2040. This trajectory would lead to increasingly severe weather events like heatwaves, floods from intense precipitation, coastal erosion, and other extremes, highlighting the urgent need for proactive and transformative measures to mitigate the impacts of global warming.
At its core, achieving Net-Zero emissions aligns with the Paris Agreement's objective of limiting global temperature rise to 1.5°C. The sobering assessment by Climate Action Tracker, projecting a potential rise of 2.4°C if current trends continue, underscores the necessity for swift and sustained actions to prevent catastrophic consequences.
The Science Based Targets Initiative defines corporate Net-Zero as a commitment to reduce scope 1, 2, and 3 emissions to zero or to a residual level that aligns with achieving Net-Zero globally or within specific sectors by pathways compatible with limiting global temperature rise to 1.5°C. Additionally, it requires companies to offset any remaining emissions at the Net-Zero target year and beyond.
Net-Zero effects
The impact of achieving Net Zero is profound, with over 4,000 companies worldwide taking the lead in transitioning to a net-zero economy. These companies have committed to reducing their emissions based on climate science, as endorsed by the Science Based Targets initiative (SBTi). As of March 2023, more than 2,300 companies have had their science-based targets approved by the SBTi.
The SBTi's 2021 Progress Report highlights significant milestones: one-third of global market capitalisation is now dedicated to climate action through SBTi-approved targets, covering emissions totalling 1.5 billion tonnes of CO2 (Scope 1 and 2). In 2021 alone, these efforts resulted in the reduction of 53 million tonnes of CO2 emissions across all targets.
India, as a developing economy, faces the intricate task of balancing economic growth and poverty reduction while addressing greenhouse gas (GHG) emissions. Notably, India's emissions, though projected to increase, stem from a historically modest starting point. From 1850 to 2019, India's cumulative emissions amounted to less than 4 per cent of the world's total carbon dioxide emissions from the pre-industrial era, despite hosting 17 per cent of the global population.
At COP 26 in November 2021, India underscored its commitment to achieving net-zero emissions by 2070. This pledge aligns with principles of equity, climate justice, and the concept of Common but Differentiated Responsibilities and Respective Capabilities under Article 4 of the Paris Agreement. India has submitted a comprehensive long-term low-carbon development strategy to the UNFCCC, emphasising the goal of achieving net-zero emissions by 2070.
India’s Initiative
Prime Minister Modi articulated India's "Panchamrita" or five-fold strategy at COP 26 to confront climate change with specific targets:
- Increase non-fossil energy capacity to 500 GW by 2030
- Attain 50% of energy needs from renewable sources by 2030
- Cut projected carbon emissions by one billion tonnes by 2030
- Reduce the carbon intensity of the economy by 45% by 2030
- Achieve net-zero emissions by 2070.
India's long-term low-carbon development strategy revolves around seven pivotal transitions:
- Developing low-carbon electricity systems in line with broader development objectives
- Creating an integrated, efficient, and inclusive transportation network
- Advancing adaptation through urban design, energy efficiency in buildings, and sustainable urbanisation
- Promoting across-the-board decoupling of economic growth from emissions, fostering an efficient, innovative, and low-emission industrial system.
- Investing in carbon dioxide removal technologies and related engineering solutions
- Enhancing forest and vegetation cover, mindful of socioeconomic and ecological considerations
- Addressing economic and financial requirements associated with low-carbon development
ONGC's Plan
ONGC has committed to investing Rs two lakh crores by 2038 in various decarbonisation projects. These initiatives will focus on improving energy efficiency, reducing flaring, and expanding solar power and other sustainable energy sources. In the first phase, ONGC plans to invest Rs. 97,000 crore by 2030. By 2035, an additional Rs. 65,500 crore will be dedicated to these efforts, followed by another Rs. 38,000 crore by 2038.
